Asian Shares Rise on Wall Street Optimism, Eyes on Federal Reserve Meeting
Asian shares were trading higher on Monday amid optimism over the rally that ended the week on Wall Street, with investors closely watching the upcoming Federal Reserve policy meeting.
Sydney’s S&P/ASX 200 added 0.6% in early trading, while South Korea’s Kospi surged nearly 1.0% and Hong Kong’s Hang Seng jumped 1.2%. The Shanghai Composite also rose 0.6%.
Trading was closed in Tokyo for a Japanese national holiday, but the market mood remained positive after last week’s tech-driven rally on Wall Street. Strong earnings reports have boosted market sentiments, although the declining Japanese yen is a risk factor that investors are monitoring closely.
The yen reached a new 34-year low after the Bank of Japan’s decision to keep interest rates unchanged, which was in line with expectations. The U.S. dollar edged up to 159.17 Japanese yen on Monday.
A weak yen can benefit Japan’s exporters like Toyota Motor Corp., but it can also hurt the economy in the long run by reducing purchasing power and possible wage growth.
On Wall Street, the S&P 500 rallied 1% to finish its first winning week in the last four, while the Dow Jones Industrial Average rose 0.4% and the Nasdaq composite jumped 2%.
Analysts expect the Federal Reserve to keep rates on hold following recent data on U.S. inflation. Treasury yields eased in the bond market, with the 10-year Treasury falling to 4.66%.
In energy trading, benchmark U.S. crude fell to $83.05 a barrel, while Brent crude lost to $88.59 a barrel.
Investors will be closely watching the Federal Reserve policy meeting set for later this week to gain insights into the central bank’s stance on interest rates and inflation.
